Delegate’s decision not to depart from policy not outside range of acceptable outcomes

Tax - Income Tax - Foreign Income

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College with campus in Qatar and number of employees discussed eligibility to claim Overseas Employment Tax Credit (OETC) with Canada Revenue Agency (CRA) and received consistent response that college was not engaged in qualifying activity. College began providing employees with OETC claim forms in late 2008 and in 2010, employee L filed appeal of denial of OETC and Tax Court of Canada (TCC) ruled in his favour. After L decision, numerous current and former employees of college applied for adjustments with respect to their taxation years in issue. Applicants requested taxpayer relief pursuant to ss. 152(4) and (4.2) of Income Tax Act, seeking adjustments to allow OETC to be claimed for taxation years ranging from 2003 to 2010. Delegate of Minister of National Revenue sent decision letters to each applicant and subsequently, 153 applicants filed judicial review applications in respect to decisions to deny certain of adjustment requests. Following reconsiderations, decision letters were sent which allowed adjustment requests in respect of taxation years that were within normal three-year reassessment period, allowed adjustment requests that involved taxation years outside of reassessment period where applicant had not been advised by CRA of certain recourse rights, but denied remaining requests and seventy applications for judicial review were brought and consolidated for case management purposes. Applicants sought judicial review of decisions. Applications dismissed. Decisions were reasonable. CRA policy was not to perform reassessments or issue refunds in circumstances where taxpayer’s request was based only on successful appeal by another taxpayer. Applicable policy documents did not preclude delegate from considering extent to which adjustment request had resulted from ruling of court, even if ruling was not sole cause of request. Decisions turned most significantly on fact that, because L decision was not applicable law when timely requests for adjustment of statute-barred year could have been filed, such requests would not have been granted. Delegate’s decision not to apply L decision retroactively was consistent with CRA policy, that policy had been found to be consistent with s. 152(4.2) of Act and decisions demonstrated that delegate was aware of applicants’ circumstances. There was no basis for conclusion that delegate’s decision not to depart from policy based on applicants’ circumstances was outside range of acceptable outcomes based on facts and law applicable to matters.

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